Which of the Following Describes the Duty of Loyalty

question 2

Multiple Choice

Which of the following describes the duty of loyalty?

• A) It requires managers to make decisions they reasonably believe to be in the best interest of the corporation.
• B) It prohibits making a decision that benefits the decision-maker at the expense of the corporation.
• C) It requires consideration of the interests of the surrounding community.
• D) It requires using care that an ordinarily prudent person would take in a similar situation.

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Definitions:

Criminal Violations

Criminal violations are actions or conduct that break the law and are punishable by the state, including both misdemeanors and felonies.

Prefiling Period

The timeframe before an official document or lawsuit is formally filed in court.

Issuer

An entity that develops, registers, and issues financial instruments like stocks, bonds, or credit cards for the purpose of financing.

Negotiations With Underwriters

Discussions and arrangements concerning terms and conditions between the issuer of a security and the financial entities responsible for selling it to the public.